Minerva blow as shops centre contract lost

Minerva had planned to develop the 900,000-sq ft Park Place scheme in Croydon but was thrown off the site when the council cancelled a long-standing agreement.

Councillors in Croydon said they were fed up with almost a decade of inactivity, and could no longer allow Minerva to "blight" the town centre.

They also threatened to force Minerva to sell the land so they could press on with an alternative project with a new developer.

"It is hoped that a new compulsory purchase order will not be necessary, but this will be a fallback position when a new development partner is in place," the council said.

That could prove very costly for Minerva, which last year saw the value of the site halve to £71.5 million in the downturn.

Shares in Minerva fell another 1p to 12¼p, having crashed more than 90% in the past 12 months on funding problems and the collapse in the property market.

Minerva was given outline consent in 2000. It struck a development deal with Croydon in 2004 to build a shopping centre with 130 stores, restaurants and cafés anchored by a department store, preferably John Lewis.

But its partner Lend Lease pulled out last year, and it has been struggling to raise the necessary funds ever since. John Lewis also backed out of taking on a major new store.

Council leader Mike Fisher today said: "It has become all too apparent that in the present economic climate there is virtually no chance of Minerva bringing on board the partners it
needs to make the retail scheme happen.

"Rather than prolong the inactivity that has blighted the site for so long, the council now intends drawing up a revised strategy for the site which will include attracting John Lewis to the town centre.

"Minerva has had its chance. It is a shame for everyone concerned, including the developer, that this chapter has not produced a happy ending."

Minerva said that it was still hoping to develop the land, but the company admitted that finding a partner during a recession has so far "proved extremely challenging".

Planning permission for the scheme — bounded by Park Lane, Katharine Street, High Street, North End and George Street — lapsed last week.

The firm is in talks with its bankers over its debts.

Concerns are mounting over the viability of other developments — including two office blocks in the City of London, only one of which is
partially let.